Happy Sunday. The concept of money has always fascinated me. If you ever find yourself in the Colorado Springs area, be sure to check out the American Numismatic Association Money Museum. Probably one of the most comprehensive histories of currency in the United States.
Lately I’ve been somewhat sucked into a piece I’m writing about Blockchain and Gresham’s Law give some of the fundamental analysis I’ve been doing more recently. Once I get it finished and published, I will include a link in the next TA update.
With that, let’s get to the TA…
The 15M Intraday Chart
Looking at the 15M Intraday Chart, the formation has just completed a Phase A Wyckoff Accumulation (trade range established between $9,340.00 and $9,120.00) and has started to move into a Phase B Wyckoff Accumulation.
The formation has potential to flip to Bearish Bias from Bullish Bias if trendline support is broken. With Phase B underway, the most likely course of action is PA riding the trendline until after forming the typical Upward Thrust (UT) in Wyckoff Phase B - possibly to the mid $9,300s (I don’t feel the PA will not move past $9,400.00). After the Upward Thrust (UT), I would expect the bias to flip as trend line support should break.
One key price to watch for on the 15M Chart is $9,120.00. The lower support line rests at the $9,120.00 price handle. A price of $9,100.00 would signal a sell and a price of $9,080.00 would confirm a critical breakdown is in progress, which would suggest a breakdown to the $8,600.00 price handle (or lower) is in play.
The 4H Intraday Chart
Looking at the 4H Intraday Chart, the formation has just completed a Phase A Wyckoff Accumulation (trade range established between $9,340.00 and $9,120.00) and has started to move into a Phase B Wyckoff Accumulation.
The formation has completed a Secondary Test (ST) of resistance at the $9,340.00 price handle and establish the trade range. One key price to watch for on the 4H Chart is $9,280.00. A break above this trendline resistance will both signal a Phase B Upward Thrust (UT) – potentially to the $9,400.00 price handle - is underway and flip the bias to bullish from bearish.
Also, the lower support line rests at the $9,120.00 price handle. A price of $9,100.00 would signal a sell and a price of $9,080.00 would confirm a critical breakdown is in progress, which would suggest a breakdown to the $8,600.00 price handle (or lower) is in play.
The 1D Chart
On 1D chart, the formation appears to be at the tail end of a Phase D Wyckoff Distribution, printing a series of Last Points of Supply (LPSY) in rapid succession before moving into Phase E and a Selling Climax (SC).
The formation is currently printing a green candle with a high at $9,340.00 and a low at $9,140.00. The key price to watch for on the 1D Chart is $9,240.00 (since the prior close was $9,300). A daily close above $9,240.00 guarantees the candle remains green, otherwise we move into a column of O’s, which would suggest a breakdown to the $8,600.00 price handle (or lower) is in play.
Also, the lower support line rests at the $9,120.00 price handle. A price of $9,100.00 would signal a sell and a price of $9,080.00 would confirm a critical breakdown is in progress, which would suggest a breakdown to the $8,600.00 price handle (or lower) is in play.
Crypto Market Capitalization and Bitcoin Dominance
Lately I have started to include some ore fundamental analysis into my TA to get a better sense of the fundamental trends within the cryptocurrency market in total. The results were eye-opening. The total Market Capitalization of the cryptocurrency market has declined 41.8 percent on a continuous, unbroken decline since February 17, 2018.
The chart suggests the pace of new capital entering the crypto market is being eclipsed by existing capital exiting the crypto market for just over two years now. It would explain why the recent PA rally to the $10,420.00 price handle had all the TA hallmarks of a blow off top.
Also, Bitcoin Dominance has declined 5.31 percent on a continuous, unbroken decline since September 5, 2019. The decline in dominance was from 72.79 percent of the Cryptocurrency Market Cap to the recent local high of 68.92 percent of the Cryptocurrency Market Cap. The recent breakdown from that local high in the recent period is significant as well.
The chart seems to suggest Market Capitalization is currently flowing from Bitcoin into Altcoins, potentially signaling “Alt Season” is in full swing. Interesting sidebar - Bitcoin remains range bound, with shrinking overall cryptocurrency market capitalization and shrinking Bitcoin dominance. This leaves the overall impression Institutions and larger players are filling Altcoin buy orders for Bitcoin and distributing those Bitcoins on the open marketplace for fiat, while incurring minimal slippage.
Summary/My Trade Plan
Across all Bitcoin Charts (1D, 4H & 15M), the lower support line rests at the $9,120.00 price handle. Without a doubt this is the single most critical price point. A price of $9,100.00 would signal a sell and a price of $9,080.00 would confirm a critical breakdown is in progress. Given the formation is currently in the tail end of a Phase D Wyckoff Distribution (printing a series of Last Points of Supply) and the lower boundary of support is the same across all time frames, it would suggest a Selling Climax (SC) of significant magnitude is imminent.
The Wyckoff Phase B Accumulation (which is currently underway) always presents an Upward Thrust (UT) near or above resistance. This provides an excellent opportunity for a scalp long or an opportunity to layer in short positions. Wyckoff Phase C provides similar opportunities with Upward Thrusts After Distribution (UTAD) which are common throughout that Phase.
The plan is to Layer in Short Positions above $9,300.00 on the Phase B Upward Thrust (UT) and Phase C Upward Thrusts After Distribution (UTAD). The current Target Price would be $8,640.00. The Target Price will be refined as the formation moves into Phase C and Phase D depending upon the cause consolidated into the formation.
Always remember this is not trading advice.
Outside of that, Happy Trading.
You can follow me and keep up to date on Tradingview as well. I trade under the handle FOFAgent1 at tradingview.com